Write out the profit-maximization conditions for a monopolist to mark-up over price. That is, what is...

Write out the profit-maximization conditions for a monopolist to mark-up over price. That is, what is (PMC)/P equal to if the monopolist is profit-maximizing. From there, solve for PMC to give a measure of the degree to which the monopolist price is distorted from the long-run perfectly competitive price, P = MC. This is the distortion for a monopolist in a one-sided market. Now, refer to your notes on the markup rule for a profit-maximizing platform monopolist in a two-sided market. Is the platform monopolist’s price on one side of the market more or less distorted than that for a monopolist in a one-sided market? Explain.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

a) Evaluate and explain the following assertion: “Profit maximization on the part of a monopolist means...

a) Evaluate and explain the following assertion: “Profit maximization on the part of a monopolist means that the reduction in a value-added tax (VAT which it remits to the government) will not lead to a reduction in its prices”. (b) Explain the case of deadweight welfare loss if there is an efficiency loss

7. Show analytically that the necessary condition for the profit maximization of a monopolist that supplies...

7. Show analytically that the necessary condition for the profit maximization of a monopolist that supplies his output in two separate markets with two different demand functions is MR1 = MR2 = MC. I please for the clear explanation :)

3. Profit maximization and loss minimization BYOB is a monopolist in beer production and distribu...

3. Profit maximization and loss minimization BYOB is a monopolist in beer production and distribution in the imaginary economy of Hopsville. Suppose that BYOB cannot price discriminate; that is, it sells its beer at the same price per can to all customers. The following graph shows the marginal cost (MC), marginal revenue (MR), average total cost (ATC), and demand (D) for beer in this market. Place the black point (plus symbol) on the graph to indicate the profit-maximizing...

1. Is profit maximization acceptable as the objective of production in Islamic economics? ( 20 mark...

1. Is profit maximization acceptable as the objective of production in Islamic economics? ( 20 mark ) 2. What are the four (4) characteristics that define “prohibited interest rate”? Explain Muslim scholars’ arguments in justifying the prohibition of interest rates. ( 20 mark )

Profit Maximization: firms make the most profit by setting their output (or price if they have...

Profit Maximization: firms make the most profit by setting their output (or price if they have market power) where marginal cost (mc) equals marginal revenue (mr). Again, explain why profits are largest when mc=mr and describe how that works in monopolistic competition when the firm can choose the point on market demand where it wishes to operate. Explain why the firm does not produce where marginal cost crosses demand (that is where a competitive firm would be located) but rather...

1. 1. Discuss the conditions for profit maximization for the perfectly competitive firm in the short...

1. 1. Discuss the conditions for profit maximization for the perfectly competitive firm in the short run. In addition to the basic criteria, describe the cost and revenue situations on either side and why, in terms of cost and revenue, the firm will move toward that optimal point. Consider an avocado farmer operating as such a firm. He owns four acres of land on which to plant a single crop. To plant one acre of avocados, he must pay $30...

Explain each of the best conditions in the issue of corporate profit maximization and cost minimization....

Explain each of the best conditions in the issue of corporate profit maximization and cost minimization. Compare and explain the balance conditions of the fully competitive market and the balance of the Cournot and Bertrand in the oligopoly model.

What is the profit maximization condition for perfect competition?

part 1. With a 25% mark up on selling price and a cost of $270,what...

part 1. With a 25% mark up on selling price and a cost of $270, what is the selling price?part 2. If the mark up on a product is 80% of selling price, what is the equivalent markup on cost?part 3. With a product cost of $6, what should the selling price be to produce a 20% markup on selling price?part 4. If a product now selling for $1000 was first marked up by the seller 50% on cost, what...

11b b. List and explain the conditions under which the Oligopolistic firm achieves profit maximization and...

11b b. List and explain the conditions under which the Oligopolistic firm achieves profit maximization and loss minimization using the MR-MC approach. Be thorough. i. Using the MR MC approach, discuss how to determine when the oligopolistic firm maximizes profit or minimizes loss in the kinked demand curve model.

Subjects